Level 3 Reports Fourth Quarter and Full Year 2012 Results

Fourth Quarter and Full Year 2012 Highlights
• Grew Core Network Services (CNS) revenue for the fourth quarter 2012 by 1.8 percent sequentially and 4.7 percent year-over-year, on a constant currency basis
• Grew fourth quarter 2012 Enterprise CNS revenue by 2.2 percent sequentially and 7.8 percent year-over-year, on a constant currency basis
• Adjusted EBITDA was $407 million for the fourth quarter 2012. Excluding a $27 million net benefit from special items recognized in the fourth quarter 2012, Adjusted EBITDA grew 18 percent for the full year 2012 compared to the full year 2011 pro forma
• Generated $202 million of positive Free Cash Flow in the fourth quarter 2012 [and $48 million of positive Free Cash Flow for quarters two through four of 2012, in line with guidance
• Capital expenditures were $743 million for the full year 2012, approximately 12 percent of total revenue

BROOMFIELD, Colo., Feb. 12, 2013 — Level 3 Communications, Inc. (NYSE: LVLT) reported total revenue of $1.614 billion for the fourth quarter 2012, compared to $1.590 billion for the third quarter 2012 and $1.579 billion for the fourth quarter 2011. For the full year 2012, total revenue was $6.376 billion, compared to $6.318 billion pro forma for the full year 2011.
The net loss for the fourth quarter 2012 was $0.16 per share, excluding a loss on the extinguishment of debt of $0.23 per share and a benefit from special items recognized in the fourth quarter 2012 of $0.13 per share. The net loss for the fourth quarter 2012 was $0.26 per share prior to excluding the effects of the loss on extinguishment of debt and the benefit from the special items. The net loss for the fourth quarter 2012 was $56 million, compared to a net loss of $166 million for the third quarter 2012 and a net loss of $163 million for the fourth quarter 2011.
Adjusted EBITDA was $407 million in the fourth quarter 2012, and included a $27 million net benefit from a non-cash reduction in asset retirement obligations (ARO) of $47 million, partially offset by severance and related charges of $20 million. This compared to $372 million in the third quarter 2012 and $271 million in the fourth quarter 2011. For the full year 2012, excluding the net benefit recognized in the fourth quarter 2012, Adjusted EBITDA was up 18 percent compared to the full year 2011 pro forma.

“Level 3 continued to grow revenue in the fourth quarter, and we see the opportunity to improve revenue growth in 2013,” said James Crowe, CEO of Level 3. “We made good progress with integration throughout 2012, invested in the business for future growth, and firmed up our balance sheet with over $4.5 billion of capital markets transactions last year, positioning us well for 2013.”
Financial Results

http://files.shareholder.com/downloads/LVLT/2317497380x0x634874/8a630a88-2b78-420c-a75c-f0140e75e816/4Q12_Earnings%20Release.pdf

4Q12 Financial Statements
http://files.shareholder.com/downloads/LVLT/2317497380x0x634875/022c077b-83f1-4421-88ad-79c3005427a3/4Q12%20Financial%20Statements_FINAL.pdf

Slides
http://files.shareholder.com/downloads/LVLT/2317497380x0x634876/6ea7e933-1489-4ea0-a00d-74b6f20210ec/4Q12_Earnings%20Presentation_FINAL.pdf

4Q12 Supplemental Schedule
http://lvlt.client.shareholder.com/common/download/download.cfm?companyid=LVLT&fileid=634877&filekey=925f3af5-103b-47b1-9dae-6d545cc41f9b&filename=Supplemental Schedules for 4Q12_FINAL.xlsx

LVLT Chart
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Analyst Estimates
http://www.marketwatch.com/investing/stock/lvlt/analystestimates